Greetings, and welcome to the Huntington Bancshares First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Mark Muth, Director of Investor Relations.

Thank you, Daryl. Welcome. I'm Mark Muth, Director of Investor Relations for Huntington. Copies of the slides we'll be reviewing can be found on the Investor Relations section of our website, www.huntington.com. This call is being recorded and will be available as a rebroadcast starting about one hour from the close of the call. Our presenters today are Steve Steinour, Chairman, President and CEO; and Zach Wasserman, Chief Financial Officer; Rich Pohle, Chief Credit Officer will join us for the Q&A session. As noted on Slide 2, today's discussion, including the Q&A period, will contain forward-looking statements. Such statements are based on information and assumptions available at this time and subject to changes, risks and uncertainties, which may cause actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of risks and uncertainties, please refer to the slides and the material filed with the SEC, including our most recent Form 10-K and 8-K filings. Let me now turn it over to Steve.

Thanks Mark. Good morning, everyone. Slide 3 provides an overview of Huntington's strategy to build the leading people-first digitally powered bank in the nation. We continue to execute against this strategic vision and are pleased with our progress to-date. We see significant opportunities ahead of us, as we position our businesses for the recovery at hand. Over the past year, we updated our multi-year strategic plan with a focus on driving long-term revenue growth, continuing to build our brand based on best-in-class products and increasing our industry-leading customer satisfaction across our businesses. We also announced the planned acquisition of TCF Financial, which will provide powerful opportunities to grow revenue, expand our market presence and provide scale to our businesses while increasing our investments in digital and other areas. This combination will increase our capacity to invest and we will become more efficient with the significant expected expense takeouts. We accelerated our digital investments as part of our strategic vision and are encouraged by the digital adoption trends. Due to the investments we've already made, for the first time over half of new customer deposit accounts were originated digitally in the last quarter. The double-digit growth in active digital and mobile engagement is similarly encouraging. As we look ahead, we're optimistic about a strong economic recovery. Unemployment has decreased significantly across our footprint. We’re again, hearing a crescendo of commentary from our customers regarding labor constraints and wage inflation. Consumer confidence has meaningfully improved. On average, consumers are less leveraged and more liquid. Our debit card trends have consistently posted double-digit year-over-year growth rates for the past several quarters. Consumer spending in service industries is expected to broadly accelerate this year as demand returns. Consumer loan production also continues to be strong. On the commercial side, sentiment is encouraging. Our pipelines…

Thanks Steve, and good morning, everyone. Slide 5 provides the financial highlights for the first quarter. We reported earnings per common share of $0.48. Return on average assets was 1.76% and return on average tangible common equity was 23.7%. Bottom line results were augmented by two notable items. The first was a $144 million mark-to-market benefit on our interest rate caps, driven by the steepening yield curve and increased market volatility. The second was $125 million or 7% reserve release, resulting from the improving economic outlook and credit metrics. Partially offsetting these were $21 million of TCF acquisition-related expenses, which are broken out as a significant item in the earnings release with granularity provided in Table 8. Now let's turn to Slide 6 to review our results in more detail. We continue to be pleased with our sustained growth of pre-tax pre-provision earnings, which increased 15% year-over-year in the first quarter. Total revenue increased 19% versus the year ago quarter. Net interest income grew 23% driven by solid underlying loan growth and a 34 basis point increase in NIM, which were positively impacted by the substantial mark-to-market gain that I mentioned in our interest rate cap derivatives and the $44 million of accelerated PPP loan fee accretion. Fee income growth of 9% was aided by a record first quarter for mortgage banking income, as saleable mortgage originations set its own record with 89% year-over-year growth and secondary marketing spreads remained elevated. Similarly, our wealth and investment management businesses experienced its best quarter ever with respect to net asset flows and also benefited from positive equity market performance over the prior 12 months. Card and payments continue to post strong, consistent growth. Deposit service charges remain below the year ago level as elevated consumer deposit account balances continue to moderate the…

Thank you, Zack. Daryl, we will now take questions. We ask that as a courtesy to your peers each person ask only one question and one related follow-up. And then if that person has additional questions, he or she can add themselves back into the queue. Thank you.

Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is come from the line of Ken Zerbe with Morgan Stanley. Please proceed with your questions.

All right, great, thank you. Good morning.

Good morning, Ken.

Why don't we start – just in terms of the interest rate caps, I probably may not be the only one who didn't appreciate how meaningful this could be on a mark-to-market basis for our NII. I get that you added the short cap position, but it still seems that you are sort of – you have a fair amount of long exposure outstanding. Can you just talk about the volatility that we should expect sort of on how long does this volatility last over time? And I mean, is it right to assume that we could be looking at maybe not $100-plus million swings, but $50 million, $60 million swings in NII in any given quarter, up or down?

Hi Ken, this is Zach. I'll take that question. And look, I would start by saying the priority of our – the goal for this position and our strategy here was to look around the corner to manage risk to protect capital and to be dynamic and proactive to do that. And we thought it was a really smart move, and as you saw it, I think it benefited us substantially. And so that also underlies our decision to continue to maintain this position, albeit somewhat colored as we discussed for the foreseeable future. And so we'll have to see what happens. These get marked to market every day. And then, ultimately, we post the result that's extent at the very last day of the quarter. But we believe it is the right position as we go forward here. So we'll have to see. We'll keep you posted. But over the long-term, we think it's a really smart position for us to protect our capital.

Ken, I'll just add, what we executed these in the fourth quarter. Remember the outlook was the rates would be flat through – well into 2023. So we thought the benefit of this capital protection would be in the out years, four, five, six plus and obviously, interest rate outlook changed very rapidly after the election. But it wasn't our intent to sort of view this as some kind of short-term position when we originated it. It was this protection of capital over time.

Got it. No, it definitely worked out incredibly well this quarter. No doubt about that. My second sort of related follow-up question. Is it a little more in the weeds. I think I'm missing something, but would love your clarification on this. If we look at just the change in net interest income from last quarter to this quarter, and we back out only the change if – the way I understand it, the change in the caps of, call it, $140 million to the positive. And then we backed out another $40 million change in PPP income, it implies that net interest income actually went down by $32 million sort of on an all else equal basis. Am I missing something in that calculation?

I think you got it right. I think we saw – as we noted in the commentary, a bit of pressure on underlying loans in the quarter just from the headwinds that we're seeing in line utilization, but that was offset by really strong fee income growth during the quarter. The NIM, if you were to strip out that cap gain was $2.97 to give you a sense of the net interest margin.

And Ken, you also had the impact of day count, if you're looking at the dollars.

On a sequential basis, correct.

Got it, okay. All right, perfect. Thank you very much.

Thank you. Our next question is come from the line of Matt O’Connor with Deutsche Bank. Please proceed with your questions. Matt O’Connor: Good morning.

Good morning, Matt. Matt O’Connor: I know you talked about it in the past here and there. But as we think about the increased investment spend this year, specifically on technology and digital. I was just wondering if you could summarize what a couple of the kind of bigger initiatives that your spend is that's driving that higher investment spend this year?

Yes. I think – this is Zach. I'll take that, and Steve may want to tack on as well here. But what we really like about our strategic plan is it's incredibly focused, and it's driven by key initiatives across each of our business lines. So within our consumer business line, which we've talked about for a while, much of the increased investment is around digital with three major focus areas as we talked about over the last several years and certainly last year, improving our digital point-of-sale and product origination capabilities. We largely completed that last year. And now the teams are working through how to best optimize and incorporate that within the omnichannel client engagement process we have for client origination. Also, a lot of focus around engagement and deepening to personalization and ease of use client account servicing. In the commercial business, significant amount of digital investment as well around new client onboarding, relationship manager digital tool sets as well as focused investment in new people, for example, in specialty banking and in our capital markets business. We're also really pleased with the investments we're putting into our wealth and investment management business, which, again is sort of a mixture of both technology to improve the client adviser interaction experience and relationship management tools as well as select people hires as we bring on new relationship managers, which is, as I mentioned in my script, really driving substantial sales growth and performance. And lastly, I would highlight vehicle finance. For the last several years, we've been working to digitize the customer experience as well as continue to expand the geographic footprint of that business in a way that's really constructive. Steve, do you want to talk about that? Matt O’Connor: That's a very helpful summary. As we think half the cost saves associated with the TCF deal, you'd mentioned long-term expense growth. Like what is a good call it, three to five year outlook on expense growth? And I understand it might be somewhat revenue dependent. But if you think about most revenue growth coming from loans, NIM expansion, hopefully, things that aren't super high on the efficiency ratio, what would a good range for underlying expense growth be?

Yes. It's a great question. And I would note that for the next several years, based on our forecast for the integration of the TCF acquisition, overall reported revenue and expense growth levels will be substantially impacted by that, and you're going to see quite high levels of growth in both as we incorporate that business and measure the year-over-year growth. But kind of an underlying basis, which I know what's the basis of your question, my expectation and goal is that we're growing the top line at or above nominal GDP, with revenue lower than that and driving positive operating leverage. I think over the long-term, something like 1.5% to 3.5% sort of inflationary growth is logical. And if revenue is stronger than perhaps expenses are stronger than that. But generally, that's my broad expectation.

Ken, I just want to reiterate the commitment to positive operating leverage after nine years, we've elected this year to make investments coming off the strategic plan and particularly because of the economic volatility that we saw last year with the virus and the expected recovery. We think we are playing this in terms of timing, exactly right. We've got a series of near-term revenue growth initiatives that we're executing. And that will position us for the long-term, but we will be back to positive operating leverage. Matt O’Connor: Thank you.

Thanks Matt.

Thank you. Our next question is come from the line of Ken Usdin with Jefferies. Please proceed with your questions.

Hey, thanks. Good morning. Just one follow-up on the expense side. So clearly, you have the excess revenues helped by the swaps and then a higher expected growth rate this year on the expenses, which makes sense that you're continuing to accelerate. But just, Zach, you mentioned last quarter, a different cadence between first half expense growth and second half expense growth. I just want to try to understand, is the increment that's embedded in the new expense growth rate also going to show all in the first half in part due to the items in the first? Just kind of if you can walk us through how things traject from here would be helpful. Thank you.

Yes, Ken, thanks for the question. I appreciate the chance to clarify. I would say approximately three quarters of the incremental expenses were what we saw come through in Q1. So there's a small lift in the balance of the year, but most of it was what we saw come through in Q4, Q1. And the key thing with our plan is as that we're front-loading these investments into the first half of the 2021. And so the expectation is really the same as it was before, elevated expense growth on a kind of core run rate basis in the first half coming down to more normal levels in the second half of the year. And of that 6% to 8% underlying core expense, approximately five percentage points of that is our long-term strategic investments. And the other 1% to 3% is really sort of a natural expense inflation that you might expect and some normalization of company-wide programs like merit and T&E and medical costs and things of this nature and some additional expenses to support the additional revenue, as I noted in my prepared remarks. So front-end loaded, back-end back to historical levels and really no change other than those factors I just talked about.

Helpful. And then the same kind of just thoughts process on the NII side. Obviously, NII outlook helped by the $144 million. Just underneath that, can you just talk about just the underlying changes to your prior views on NII versus the fees look as well? Thanks.

Yes. Overall, I expect mid-single digits interest income for the full year. I think driven by – in part by our modest growth in assets that we've indicated in the guidance between 1% and 3%. And spread – NIM spread, overall, but it will be roughly flat for the full year. I think just touching on NIM for a second. Next couple of quarters will likely be in the mid 2.80s in terms of NIM, biggest impact, just changing our expectations somewhat is continued elevated levels of Fed cash driven by the elevated levels liquidity across the system that many folks have commented on here in the earnings cycle, and, to some degree, the beginning of the roll-off of our hedges, which will be down about 7 basis points into Q2. So Q2 will be a trough to mid-2.80s for the next several quarters. But pulling off, FY 2020 still looks at like a NIM of 2.90 or better and long term, still forecasting to maintain those levels and with stable to rising NIM over the longer-term.

Got it. Thank you, Zach.

You’re welcome.

Thank you. Our next question has come from the line of Scott Siefers with Piper Sandler. Please proceed with your questions.

Good morning, guys. Thank you for taking the question. Hey, just wanted to ask, I guess, a follow-up on the rate cap. So between the – what you sort of captured in the first quarter and then the sale of the $3 billion new caps in March. So does this do anything to your – sort of your forward rate sensitivity? I think, Zach, I've sort of thought about the hedges as more balance sheet protection than really adjusting your rate sensitivity. So is there any change to that dynamic?

So I think you got it right. The position was around protecting capital. And I think you saw on the slide a 52% offset of the OCI mark on securities was protected by this. So it's really good. We've got our Treasurer, Derek Meyer in the room. Why don't, Derek, you want to comment a little bit on asset sensitivity and in your outlook for that one.

Yes. Thank you. So we've continued to look at that. Obviously, we've already stated this was primarily thinking of a capital play. There is the knock-on effect because it comes to earnings on our margin. Most of our decisionings has been to retain as much downside protection while capturing the upside. As these rates have gone up, and that is these caps have obviously made us even more sensitive in that respect, we are evaluating our next hedging moves to protect that downside without giving up that upside opportunity. So it does change the posture. That's also a big part of what we're thinking about as we evaluate our positioning with TCF, which is a separate set of decisions, but that is another set of levers that we have to incorporate into our forward view.

Yes. Broadly speaking, just pulling back a second, I think really like where the asset sensitivity kind of strategy and trend is going in that, over time, as our existing hedge position slowly rolls off, we will become more and more exposed to what will be likely a gradually increasing interest rate environment as well. And so think it's sort of well-timed for us to be exposed in that way as rates begin to rise over the next several years.

Got it. That’s helpful. Thank you. And then, I guess as a follow-up, I think, Zach, at a point, you'd mentioned the sale of the new rig caps, the $3 billion, that should sort of dampen the mark-to-market impacts. Is there a way to sort of speak to how much protection you have against future volatility like we saw this quarter, both up and down?

Yes. It's a good question. We estimate it's between 15% and 30% impact on dampening. So importantly, we wanted to maintain kind of a net long exposure there because we do think, to the extent that there's a probability of moves substantially off the forward curve, it's likely to be higher. But that dampening is sort of between 15% and 30% as you go forward.

Got it. All right, thank you guys very much. Appreciate it.

Thank you. Our next question has come from the line of Peter Winter with Wedbush Securities. Please proceed with your questions.

Good morning. I was wondering if could you talk about – you mentioned the loan pipelines are very strong. I'm just wondering, can you talk about what you're hearing from your customers about making investments and – versus kind of the appetite to draw down on lines of credit versus using that excess liquidity and maybe delaying mine drawdowns?

Peter, this is Steve. So in the last four, five weeks, I've had about 50 CEOs in small meeting virtual conversations. And the outlook by them is virtually all very positive about this year, pipelines, their backlogs, very, very encouraging and their overall economic outlook for the next couple of years also very positive. They have – in a number of situations, have supply chain constraints, some of it from mundane items, some of it for chips. But there's a curtailment that, I think, is being experienced, at least in part by these companies on the supply chain. Universally, they talk about inability to get adequate labor, very high turnover and clear wage inflation at the low end. A consequence of that will be more investment by many of them into automation all the way through including packaging. So we expect there'll be a fair amount of equipment finance activity this year. And when we combine with TCF, we'll have a seventh, eighth largest equipment finance company in the country, that should position us very well. We have a very good technology finance team that will play well with automation on the factory side. But even in the health care, health care product side, we're seeing a strong uptick. The health care systems are doing better, haven't been able to reopen and sustain activity that was diminished during the peak of the virus. So we – the people we're talking to, who are the CEOs in that arena, generally very, very confident going forward. So we think the strong pipelines we're seeing, we're up about 40% of the commercial pipeline year-over-year is reflective of what will be demand as we go through the year, probably more in the second half than first, but this – in part because many of them had very good years have liquidity and they're using that liquidity as opposed to line utilizations and other things. Inventories are low in many of these companies, and some of its supply chain, but some of its significant demand, inflation on the commodity side wood or lumber, just a whole host of areas where there's cost push. And I think that will engender further borrowing as their liquidity gets soaked up. So we're – from these conversations, we're optimistic about the continuing improvement especially seen in the second half.

Okay. Thanks, Steve. And then if I can ask just a follow-up on the PPP. You gave some pretty good disclosure on Slide 11. But what's the outlook, Zach, for the rest of the year to net interest income from PPP?

Yes. I think, as we said, the expectation is that we'll see a very substantial amount of additional forgiveness in the second quarter, and I think, to give you a sense, Q1 revenue in total from PPP was around $76 million, of which $45 million was the – have accelerated and $31 million was the underlying yield. My expectation for Q2 is around $50 million total revenue, of which basically half and half between yield and accelerated – the acceleration. And that will represent the preponderance of the PPP revenues for the first program. We'll see a little bit of a tail as we go into the balance of the year. The Round 2, I mentioned, is around $2 billion, about 85%. We think we've forgiven much of it in 2021. That will add around $1.3 billion of ADB and $60 million of revenue we estimate to the year. I know we'll have an analyst modeling call after this, and we can probably double-click into more of the details during that, but this is probably the right high-level comments for you now.

Got it. Thanks for taking my questions.

Welcome. Thanks.

Thank you. Our next question has come from the line of Bill Carcache with Wolfe Research. Please proceed with your questions.

Thanks, good morning; Steve and Zach. Some investors have expressed concern around the risk that internal combustion engine vehicles will lose value compared to electronic vehicles as they take over and obviously, there's debate around when that's going to happen. But can you speak to how HBAN is thinking about this risk, what you guys are doing about it and the extent to which you expect to play a role in helping consumers fund Q3 repurchases as well as like from the standpoint of risk of declining collateral values for your existing book, if you could comment on that as well.

So Bill, Steve. Good question, thank you. We think this is going to be an extended transition here. And I believe the industry is of that belief as well. There's – EV is building in the country, but it's building at a very slow rate. Now that may accelerate with climate posture of the Biden Administration and for other reasons, including consumer awareness around environmental and change in demand. But combustion engines, we think, are going to be here through the decade in terms of demand and substantially there, if not fully through production. Having said that, in terms of the impact of us, we're a super prime lender. So whether it's a combustion engine or a hybrid or EV, we work with a view of very low default rates. And so marginal loss rates might increase a bit and have probably would anyway because we're at record highs in terms of bluebook values for use. So – but we don't see it as a big event. In terms of opportunity for us, it's one of the areas of environmentally sensitive financing that we're looking at. There are a series of other areas where we're actively engaged and extending credit in the – over time as we look back in the billions of dollars. And there may be an opportunity for us to do something unique with hybrids or EVs as we go forward.

That's very helpful. And as a follow-up, Steve, can you give a bit more color on some of the things you're doing ahead of the TCF closing just to make sure you hit the ground running next year. Is most of the initial focus on insurance move integration versus maybe is it just too early to be thinking about the revenue synergy opportunity that is down the road? Or is that in the mix as well? Any color around that would be helpful.

So when we announced, we talked about expense synergies, and we're fairly definitive, but we also alluded to revenue synergies. Our – to start with, our offerings, both consumer and business, are much more extensive than TCF. So it sets up a cross sell, something we've been working on, and we caught what we referred to it as optimal customer relationships. So we've been doing this for a decade. We have very good experience with cross-sell into the Firstmerit customer base. We expect to do as well or even better based on the learnings and experiences in the relative position. TCF also outsourced a number of businesses or products, which we manage directly. And so we'll expect lift out of those. So there's a variety of revenue initiatives, which we are pursuing, in some cases, we've already activated such as SBA lending Minneapolis, an activity that TCF didn't have. And so as we go forward, we'll expect these revenue initiatives. And we'll share them at a future point, will be significant upside to what we've presented in a summary level. So we'll detail where we expect to get them as we proceed. But the first order of business is to execute the committed expense takeout and to get the synergies on that front that we expected with the closing expected later this quarter and a conversion late in the third quarter.

Got it. Thank you for taking my questions.

Thank you.

Thanks, Bill.

Thank you. Our next question has come from the line of Steve Alexopoulos of JP Morgan. Please proceed with your questions.

Good morning, this is Janet Lee on for Steve Alexopoulos. Just digging deeper into your commercial loan growth guidance, I understand that in your guidance of commercial loans being flat to modestly higher for 2021, what is your assumption around the level of commercial utilization for your C&I customers as compared to the current level? And could you also provide more color around like how that compares to pre-pandemic levels?

Sure. Thanks, Janet for the questions. This is Zach, I'll take it. Overall, as I mentioned in the comments, the expectation is, excluding PPP, low single-digit growth in commercial loans and approximately 1.5 percentage of that is from some modest line utilization. Overall, the expectation for line utilization is, it has been reset, and I'll come back and speak more specifically about the pre-pandemic comparisons as you asked. But just generally characterizing the expectation. What we've seen is relatively flat in general middle market lines. My baseline expectation is a modest improvement. Likewise, what we've seen on the vehicle floor plan side is actually some retrenchment from the end of last year to where we stand now. As we go forward, we're expecting some modest improvement in both of those. Together, those represent just under 1% asset growth expectation with my total asset growth. But even if you normalize that, I think the level of strong production we've got across both consumer and commercial, we do expect to drive accelerated loan growth overall on a net basis as we go forward. Just double-clicking into the line utilization expectations, pre-pandemic, we were running in the middle market line utilization, sort of low 40%. And right now, we're in the high 30%, to give you a sense. It's been roughly flat now for several months in a row. And I would expect it will be flat for a time before it starts to rise later in the year. But I think, as has been well publicized, elevated levels of liquidity across the system are contributing to our clients just not meeting those lines at this point. But everything we're hearing from them is that, ultimately, they expect to go back to a more typical financing posture and that those will start to…

That’s very helpful. Thank you. And just turning to – I want to talk through the new money yield that what yields new purchase securities are being put on to the book versus what's rolling off and same for new loan production? And also, what's your plan around deploying excess cash? And how much of that could be deployed into securities over the next several quarters? Thanks.

Yes. I'll take the first crack at it and then Derek Meyer, our Treasurer is in the room as well. Let me tack on as we go. On the security side, we feel really good at actually about where the yields are and what we were able to deploy with roughly $2 billion of net add during the quarter came on sort of around the 160 basis point level. As we think about other new many yields, generally, some modest pressure, but not overly so. I think in the commercial business around 0.25 point lower as we went into Q1 from Q4. CRE, likewise, around 30 basis points to 35 basis points lower, auto roughly stable. So we're seeing some modest down drops on new money, but not overly material, I would say, at this point. Most of the curve impacts have been brought into the pricing. As we take a step back and think about the posture around elevated liquidity, I would say that as we've continued to update our forecast, we've ratcheted higher the expectation for elevated levels of liquidity and deposits, as is indicated by our deposit guidance. And likewise, ratcheted out in time the duration that this phenomenon will last until it begins to normalize. So likely it will take several more quarters for that to slowly start to weigh in, and it will go all the way into 2022. So that gives us the cause to really look at the best ways to deploy that. Over time, you've seen us optimize our funding structure, and we'll continue to look for opportunity to do that to bring down funding costs using that. But I think as well, looking at whether it's appropriate over time to investment in rental securities is also part of the discussion. To be clear, liquidity is the primary objective in making sure that we're managing that well. And so we'll leg into and step into in a kind of phased basis any incremental moves on that and still working through it, nothing for us specifically to talk about there. But we'll continue to be dynamic in looking at it and just watching those trends and optimizing. Anything, Derek, you can tack on to what I said?

No, I think you've covered it. We have reached a point with our BAU security strategy, where we need new money yields sort of equal to our run off yields, plus or minus 1.5. So a lot of it is going to happen with prepayment speeds and then what the yield curve shape is. I don't see a big change in trajectory.

Fine, thank you.

Thank you for your questions.

Thank you. Our next question has come from the line of Jon Arfstrom with RBC Capital Markets. Please proceed with your questions.

Hey, thanks. Good morning, everyone.

Good morning, Jon.

Good morning, Jon.

Hey. Most of it's been handled. But can you – Steve, can you talk a little bit about retention and synergies that you saw on a FirstMerit? And also touch on, like you've got the 44 branches that you're closing, what kind of retention you get from those? And how you're thinking about TCF in terms of retention as well?

We have a set of opportunities. Thanks, Jon. I'm sorry. We have a set of opportunities with TCF that are substantial in terms of retaining customers. If we think about Michigan, for example, even after our consolidations of branches, and in aggregate, there'll be more than 200 branches affected by consolidation and divestiture, we will still have number one branch share in Michigan by a factor of about 50%. So we'll be quite a bit larger than the next bank with physical distribution. So that provides an enormous set of opportunities for us in terms of retention, and we have had very high retention coming out of FirstMerit and other in-store branch consolidations. Remember, we can consolidate about 4% of the franchise every year on average. And so our retention efforts, where we decide to drop remaining ATMs outreach, we have a process we call white glove treatment that's been well-defined over the years and developed. Combination of those activities, the uniqueness of the product set, all day deposit, 24-hour grace, safety zone now, things like that also give us a distinct retention advantage. So we expect to have very high retention on the TCF side of the consumer, and on the business side, again, better product, more capabilities as we go forward. But it starts with winning minds and arts of our soon to be new colleagues, and we're actively working that. We would expect that would be successful as it was with Firstmerit. That will set up then this retention of customers through the conversion and beyond. And the product menu has just being substantially different, much bigger and better in many respects, will be to the benefit of the customer base, both consumers, small and medium-sized businesses. So we're very, very optimistic. On the specialty finance side, their equipment finance in ours is almost hand in glove. The combination will be extraordinarily effective. And they have a great team, we think we do as well, and this hand in glove will give us opportunities to further grow that business. We're excited about their inventory finance business. Got some great people in these business lines as well as the company generally, and we're going to be a stronger company as a consequence of the combination. So very bullish about the expectations, both on retention and revenue synergies as we go forward. And we'll get the expense synergies largely complete this year.

Okay, that’s very helpful. Zach, can you touch on mortgage expectations for the second quarter? I know it's kind of a mixed bag, but it looks like originations were pretty flat, what kind of thoughts do you have for the next quarter?

Yes. I don't have the Q2 right in front of, but just broadly, still thinking more just continues to beat expectations, frankly, and be very robust. I think the – overall, for the full year, expecting the revenues to be down between 15% and 20% year-over-year basis just off of the torrent pace at the 2020 represented. But most of that grow over challenge really occurs in the second half of the year. Volumes continue to be very, very robust. And I think, if you just, at an industry level, you've probably seen even mortgage banker association or ratcheting higher volume expectations for the year. I think if there's something that we're watching carefully is the salable spread. And that continues to be elevated above historical levels, but it could move quickly. So we'll see. But so far, it seems to be holding up relatively well also. So that's the expectation that we've got.

Okay, good. Thank you guys. Appreciate it.

Thanks, Jon.

Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Mr. Steinour for closing remarks.

Thank you for your questions and interest in Huntington. I'm pleased with our strong start to what will be an important year for Huntington as we execute on our strategic initiatives as well as close and integrate the TCF acquisition. I'm increasingly optimistic about the opportunities we see in 2021 and beyond, and I'm confident of our ability to capitalize on the accelerating economic recovery. The disciplined execution of our strategies, coupled with the pending acquisition, set us up to grow revenue from a larger customer base for which we will deepen existing and acquired customer relationships, resulting in top quartile financial performance. We have a strong foundation of enterprise risk management and deeply embedded stock ownership mentality, which aligns our board management and colleagues. Again, thank you for your support and interest. Have a great day.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.